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Buying a Place at the Health Care Table

By Jon Frandsen, Senior Editor
May 15, 2009

It's doubtful that any industry was held in lower regard than health insurance and pharmaceutical companies until Wall Street did them a favor by taking corporate greed and negligence to undreamed of heights. So it's terribly, terribly tempting to dismiss the recent promise by them and other health-related business to hold down the costs of medical care with deep suspicion and cynicism. After all, what was stopping them from showing some pricing discipline up until now? But even if the industry's only goal was to buy a place at the bargaining table as Washington takes its first serious crack at health care reform in more than a decade, that's still an important step.

Doctors, insurance companies and others have derailed health reform efforts from the 1950s on, fearing changes under consideration would hurt them and hurt the medical system. The constant naysaying was a way of arguing that the status quo was better than the likely alternatives. But now the health care system is all but broken and change is inevitable, either by design or after it collapses under its own weight.

We need the health industry at the table just like we need all the other stakeholders. And if the industry bought a seat, it also bought itself some credibility and displayed more willingness than in the past to acknowledge that change is both possible and necessary.

Much of the change these companies are embracing involves making the system more efficient. And lord knows the health care industry has been in need of such efficiency for years. A study done jointly for the centrist Democratic Leadership Council and the liberal Center for American Progress shows that in the boom times of 1995-2005, when productivity gains helped drive economic growth, the health care industry was one of the few to actually see slight losses in productivity. Some industries saw productivity grow by leaps and bounds -- information technology grew a whopping 5.7% a year during that decade -- while the national average was 2.4%. The health care industry, in contrast, lost 0.2%.

Making long-needed changes in efficiency won't amount to any real sacrifice in terms of the industry's bottom-line. But that's OK, too. That really shouldn't be expected at this stage anyway. No smart negotiator gives up things of real value without getting something of value in return. And if health care lobbyists are anything, they're smart. They are proving that again by joining the debate. So what if they felt they needed to be in the room to protect their interests -- isn't that why we're all at the table, to ensure that sacrifices we make are in exchange for something, including sacrifice by other stakeholders? But there's the rub: In the end, will doctors, insurance companies, hospitals and drug companies finally be willing to join the rest of us and make some real sacrifice to help us get where we need to go?